Use the following tables to calculate the present value of a $25,000, 7%, five-year bond that pays $1,750
($25,000 × 7%) interest annually, if the market rate of interest is 7%Present Value of $1 at Compound Interest​ Present Value of Annuity of $1 at Compound Interest

Present Value

The existing financial estimate of a future quantity of money or stream of cash flows, with a certain return rate taken into account.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as part of a retirement strategy.

Compound Interest

Interest that accumulates on the initial amount invested and on the interest that has previously been added to that amount.